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CBRE: Driving Factors This Holiday Retail Season Include More Pop-Ups, Mobile Commerce, Discounters

Shoppers’ growing preference for variety and value will drive CBRE’s anticipated holiday retail trends for this season, including an even greater proliferation of pop-up stores, the emergence of “pop-up warehouses,” an expansion of mobile commerce and strength in discount retailing, according to a new report from CBRE.

“E-commerce is shaping how consumers shop and interact with brands” said Carol Schillne with CBRE Retail Services in Phoenix. “Retailers and shopping center owners must understand and adapt to consumers’ preferences and behaviors to stay relevant in the marketplace. Consumers prefer an omni-channel shopping experience. They may browse online and pick up in store in order to feel and touch product.”

Kerry Linthicum, also with Retail Services at CBRE’s Phoenix office continues: “Shifting from the traditional shopping center format to an experience-based, retail and entertainment destination will entice consumers to close their internet browsers and head to brick-and-mortar retailers for their shopping. Offering movie theaters, music, service-based concepts, local restaurants and specialty jewelry, art or clothing boutiques can add to the center’s appeal because consumers know they can’t always find those exact items and services online.”

Furthermore, CBRE’s 2017 U.S. Holiday Trends Guide outlines four trends shaping this season as it unfolds.

Pop-Up Mania

Short-term retail leases – often called pop-up shops – have evolved from a trend last season to a full-blown phenomenon this season. Retailers, and now retail-center owners, favor the flexibility and experimentation allowed by short-term leases, and shoppers appreciate the variety of a shifting roster of stores. Several of the largest U.S. mall owners have designated space in their strongest properties for pop ups.

More M-Commerce

It’s no secret that e-commerce is claiming a growing portion of retail sales. What’s less often highlighted is the growth of mobile commerce; eMarketer forecasts that more than a third of online sales this year will occur on phones and tablets. CBRE expects more widespread use by retailers this year of m-commerce tools for handling customer-service, mobile marketing and facilitating sales.

“Retailers that are going to win will embrace a digital strategy. Online ordering with delivery, in-store and curbside pickup may work for some retailers, while a social media approach will allow smaller and locally-owned retailers to make that personal connection to a customer before they even step foot in the physical store location,” said Schillne.

“When retailers form relationships with their customers, which is often through personalized, in-person service or through social media, customer loyalty increases. Just like a mechanic or a hair stylist, when you form trust with your customers, you keep them,” said Linthicum.

Dawn of the Discounters

Discount and off-price retailers gained momentum during the Great Recession and have sustained it in the years since with a mix of value pricing and treasure-hunt merchandising. CBRE predicts that the category will take additional marketshare this season, spurring mid-market retailers to discount their prices to compete.

“In nearly every corner of the Valley, shoppers have access to high-end outlet malls, where they can get deep discounts on the items they want without having to sacrifice quality,” said Schillne. “Outlet malls and discount retailers like TJ Maxx and Nordstrom Rack will continue to attract shoppers during the holiday season and thereafter.”

Warehouse Space, On Demand

The surge of online sales during the holiday season can create instant, short-term demand for warehouse and distribution-center space – a potential headache for retailers trying to ensure prompt delivery to customers. New services have emerged to provide a “pop-up warehouse” model in which demand for short-term industrial space in a given market is matched with suppliers. Early results show higher efficiency and lower costs.